THIS BLOG RATES THE S&P 500 BUY/SELL/OR HOLD EACH DAY WITH 2-GOALS FOR LONG TERM INVESTMENTS: (1) PRESERVE CAPITAL (2) BEAT THE S&P 500.
(((The blog is for information only. You assume all risk of its use; we don’t warrant the accuracy of our content. You must do your own due diligence.)))

Wednesday, March 16, 2016

CONSUMER PRICE INDEX (USA Today)“Inflation was tempered again in February by
plunging gasoline prices, but a measure of core prices posted a solid
increase for a second straight month.” Story at…http://www.usatoday.com/story/money/2016/03/16/inflation-consumer-prices-gas-food-fed/81833284/My cmt: CPI fell 0.1% but core inflation (excluding food
and energy) rose a higher than expected 0.3%.HOUSING STARTS“Housing starts in February climbed 5.2 percent to a 1.18
million annualized rate from a 1.12 million pace the prior month, a Commerce
Department report showed Wednesday in Washington.” Story at…http://www.bloomberg.com/news/articles/2016-03-16/housing-starts-in-u-s-climbed-more-than-forecast-in-februaryMy cmt: While housing starts were up, Permits were down
so this report was at best neutral.INDUSTRIAL PRODUCTION FALLS (MarketWatch)“After hopeful signs of stabilization in January,
industrial production decreased 0.5% in February, according to data released by the Federal Reserve on
Wednesday.” Story at…http://www.marketwatch.com/story/us-industrial-output-resumes-downturn-in-february-2016-03-16CASS FREIGHT INDEXReports from CASS Information Systems show that
year-over-year shipments have fallen 2.6% while Expenditures have fallen 5.1%
in February 2016. These are hardly robust numbers and one must conclude that
improvements in the transport stocks are not the result of increased amounts of
freight hauled. The report stated in its conclusion “…underlying economic indicators are pointing
to a sluggish first half of 2016.” Press
release at…http://www.cassinfo.com/Transportation-Expense-Management/Supply-Chain-Analysis/Cass-Freight-Index.aspxFOMC MTG (CNBC)”A dovish Federal Reserve held the line on interest rates
Wednesday and substantially scaled back its expectations for further moves
ahead. Where the U.S. central bank at its December meeting had projected four
rate hikes in 2016, new estimates released Wednesday reduced that number to
two.” Story at…http://www.cnbc.com/2016/03/16/fed-leaves-rates-unchanged.htmlMARKET REPORT / ANALYSIS-Wednesday, the S&P 500 was up about 0.6% to 2027 at
the close. -VIX was down about 11% to 14.99.-The yield on the 10-year Treasury slipped to 1.94%.The Overbought/Oversold Ratio remained “Overbought” Wednesday
for the seventeenth day in a row. RSI was overbought a week ago and is still close
to overbought today.Tick remained
overbought for the past month and the Smart-Money indicator (based on late day
action) was overbought Friday.All are
short-term bearish for the markets.S&P 500 is now 0.4% above its 200-dMA.I wouldn’t call this a trend break yet.MONEY TREND & SHORT TERM TRADINGThe short-term Money Trend indicator remains down Wednesday,
suggesting downside ahead; but the signal is not particularly strong. I
continue to hold short positions mostly in SH and some in QID. So far, these
trades aren’t working.MARKET INTERNALS (NYSE DATA) (I am getting data from various sites. Some of the
numbers are subject to minor revision so the previous day’s numbers may be
slightly different than reported yesterday.)The 10-day moving average of the percentage of stocks
advancing (NYSE) is 57.9% Wednesday vs. is 56.5% Tuesday. (A number above 50%
is usually GOOD news for the markets.)On a longer term, the 150-day moving average of advancing
stocks rose to 50.4%. A value above 50% indicates an up-trend since slightly
more stocks have advanced over the last 150-days. The McClellan Oscillator (a
Breadth measure) rose and remained positive. (Tom McClellan wrote on his
website that he considers the recent high values of the Oscillator to be too
high and that they should be interpreted as bearish.)New-highs again outpaced New-lows. The spread (new-highs
minus new-lows) was +82 Wednesday. (It was +41 Tuesday.)The 10-day moving average of the change in
spread rose to +4. In other words, over the last 10-days, on average; the
spread has INCREASED by 4 each day. Market Internals remained neutral on the markets.
The new-high new low data looks like it is getting close to a turn-around.

Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late.They are most useful when they diverge from
the Index.In 2014, using these
internals alone would have made a 9% return vs. 13% for the S&P 500 (in on
Positive, out on Negative – no shorting).Of course, few trend-following systems will do well in an extreme
low-volatility, nearly straight-up year like 2014.NTSMWednesday, Price & VIX were positive. Sentiment &
Volume were neutral. The long-term NTSM indicator is BUY. I have not followed
the guidance yet. My guess is still that the Index is topping out. We’ll see.

MY INVESTED STOCK POSITION:

TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONOn 30 Dec I reduced my invested position in my retirement
account to 30% invested in stocks thru an S&P 500 Index fund (“C”-fund in
the TSP) and on 15 Jan I reduced stock allocation to zero in long-term
accounts. The S&P 500 peaked in Mid-May and has not been able
to break higher in the past 10-months. That looks like a top to me. See “Why
the Bull Market May be Dead” in my 14 December blog at…http://navigatethestockmarket.blogspot.com/2015/12/stocks-are-topping-time-to-sell-hussman.html

Followers

About Me

I am an engineer with a lifelong interest in "playing with numbers" so what could be more fun than trying to develop a system that beats the stock market? Well, lots of things, but I decided to do this anyway.
While I am not a finance-professional, or professional investor, I have developed some skills.
I competed in two CNBC Million Dollar Portfolio contests finishing in the top 4% in 2008 (34,320th of 800,000) and the top 0.1% (448th of 500,000) in 2009. More importantly, I managed to sell out of my retirement accounts at or near the top in 2000 and 2007 and bought close enough to the bottom that I didn’t lose too much sleep. (Even Bill Gates lost SOME sleep.)
I hope that my thoughts will help you achieve your investing goals. Please remember that my ideas are free and there may be times when my ideas are worth less than what you paid.